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China Foreign Investment: Expert Q&A – Insurance Sector

Publication
|
September 2019

The spotlight for this update is on the insurance sector

The first round of liberalisation policies in respect of China’s insurance sector were announced at the Boao Forum for Asia Annual Conference in 2018. Since then, China has continued to implement legislation to liberalise foreign investment in its insurance industry. The latest round of legislative developments have come into effect and liberalisation of foreign investment in the life insurance sector has been brought forward to 2020, signaling the Chinese Government’s commitment to attract foreign investment into China.

Here is a summary of the key foreign investment requirements that now apply to the insurance sector in China:

Insurers

Professional insurance agents

Insurance brokers

Insurance asset managers

Is there any foreign shareholding restriction?

Property and casualty sector

No – up to 100% shareholding ownership is permitted

Life sector

Yes – currently limited to a maximum of 51% but this restriction will be lifted and up to 100% shareholding will be permitted from 2020

No – up to 100% shareholding ownership is permitted

No – up to 100% shareholding ownership is permitted

Yes – currently limited to a maximum of 25% but this restriction will soon be lifted and up to 100% shareholding will be permitted

Who can be a foreign shareholder?

Potentially open to all foreign institutions (subject to non-hard core qualification requirements)

It is no longer necessary for foreign investors to have operated an insurance business for at least 30 years. In addition, regulatory decisions have also been made to remove the requirement for foreign investors to have had an insurance representative office in China for at least two years1

Foreign specialized insurance agency institutions that have engaged in insurance agency business for at least 3 years (subject to non-hard core qualification requirements)

It is no longer necessary to follow the strict qualification requirements set out under the CEPA2 regime so as to wholly own a professional insurance agent

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